White paper
V
vertically
integrated
stacks
Your business technologists. Powering progress
Executive Summary
Pursuing continuous growth in the current economic climate and anticipating the
increasing competition from public clouds,
many traditional software and hardware
vendors are broadening their portfolio to be
able to offer end-to-end infrastructure and
application services known as Vertically Integrated Stacks (VISs). Their aim is to encourage customers to delay adoption of public
clouds by building private ones that take
advantage of pre-integrated components,
thereby reducing the bargaining power of
large cloud providers while remaining in
control of end-user deals that are financially
far more lucrative.
Recent acquisitions of SUN Microsystems and
3Com by Oracle and HP respectively, as well as
the lengthy bidding war between HP and Dell
for 3PAR (a storage company), are examples
of a deliberate strategy to quickly fill capability
gaps in future VIS offerings and this trend is
likely to continue for the foreseeable future.
The industry is split on the potential consequences of such extreme vendor consolidation
and what the transition of a small number of
vendors to a ‘one-stop shop’ could mean for
end customers, system integrators and the
industry as a whole.
Contents
Vertically
Integrated Stacks What is it?
Risks & Technical
Challenges
So, What Should Be
Done?
Vertically
Integrated Stacks Who are the players? Atos’ View
Opportunities What are the
benefits?
Notes
About the Authors
Jordi Cuartero is Technical Director of Atos
Olympics and Major Events Business Unit.
Nicolas Roux is Hardware Category Director in
Global Purchasing for Atos.
Mike Smith is Chief Architect of Atos Managed
Services business in the UK.
Adil Tahiri is Technology Strategy Director,
Global MO Chief Technology Office.
The authors would like to acknowledge the
valuable contribution made by Keith Inight,
Technology Strategy Director, Global MO Chief
Technology Office.
About the Atos Scientific Community
The Atos Scientific Community is a network of
some 90 top scientists, representing a mix of
all skills and backgrounds, and coming from
all geographies where Atos operates. Publicly
launched by Thierry Breton, Chairman and CEO
of Atos, the establishment of this community
highlights the importance of innovation in the
dynamic IT services market and the need for
a proactive approach to identify and anticipate
game changing technologies.
2
Top-to-Bottom Technology Provision
Vertically Integrated
Stacks - What is it?
Vertically Integrated Stack
– a definition
A vertically integrated stack refers to a solution
from a single vendor or pre-packaged and
pre-integrated technology from several vendors
that provide an end-to-end stack covering either
the infrastructure layer, the application layer or
both at the same time. In a vertical landscape, a
solution is likely to have multiple separated ‘silos’
(the entire infrastructure is dedicated to a set of
services) that communicate with each other.
Until recently, examples of vertical integration
were in the form of physical appliances (e.g.
firewalls providing a full security stack) and integrated software solutions (e.g. integrated ERP
(enterprise resource planning), where applications are bundled with customized middleware
components). The scope of VIS is growing, with
complete solutions combining multiple layers of
hardware and software, such as Oracle Exadata
(Oracle/SUN hardware + Oracle Database),
Acadia vBlocks (Cisco network components,
EMC storage, VMWare virtualization), or HP
Matrix (network, storage, blades, virtualization,
management software and run book automation software in a bundle).
“A Vertically Integrated Stack refers to a solution from a single vendor or pre-packaged
and pre-integrated technology from several
vendors that provide infrastructure layer, the
application layer or both at the same time.”
Figure 1: Vertical Integration
Full Stack Management
Application
Full Stack Management
Application
Middleware
Middleware
System Resources
System Resources
Hardware Platform/Appliance
Hardware Platform/Appliance
Storage & Backup
Network
Storage & Backup
Network
I
Often provided by a single vendor.
Even if product compatibility, connectors and other features simplify integration between
different solutions from partners, solutions made of components purchased separately from
multiple vendors cannot be considered to be a VIS.
II
Includes components that could be found
separately on the market form multiple
sources.
The stack is assembled from components that can be obtained from a combination of alternative
products on the market.
III
The component combination does not
extend the set of higher-level functionalities,
but covers lower-level prerequisities.
Suites and bundles proposed by software and hardware vendors are not necessarily VISs, as they
may simply aggregate products that provide independent functionalities.
IV
The components have been specifically
designed, tested and/or tuned to work
together.
Internal components of the stack must integrate ‘by design’. Because of this, it is common that
technical and/or license restrictions prevent each component being used separately.
V
Consistent management features are
provided.
In a VIS, management features are integrated to provide ‘single pane’ management.
Top-to-Bottom Technology Provision
3
Horizontal layers
In contrast to Vertically Integrated Stacks,
Horizontal or Best-of-Breed solutions consist of
common infrastructure technology layers that
are applied to multiple requirements. In some
cases, upper layers aggregate resources from
lower layers.
In a horizontal approach, which is typically
adopted today by system integrators, preferred
products are selected for each layer to minimize
variation and support costs across multiple services and customers. These technology layers
include the network infrastructure, the storage
platform, servers, relational databases, and application frameworks. Even if the infrastructure
is not directly shared between services and
customers, the use of common technologies
across all solutions yields benefits.
In a horizontal landscape, there is an opportunity to have multiple ‘resource pools’ that can
be shared across multiple applications.
Service Oriented Architectures (SOA) and the
adoption of interoperability standards (network
protocols, SNMP, ODBC, etc.) have contributed
to the growth of horizontal landscapes by
enabling component-oriented designs and
easing integration through adoption of standard
interfaces.
In general, horizontal stacks take advantage of
widely ratified standards that govern the interfaces between the various infrastructure and
application components that make up the stack.
Manufacturers of components typically provide
the compatibility matrices to accelerate integration and ease on-going support. However, major
vendors of packaged Vertical Integrated Stacks
also provide most of the components separately to integrated horizontal stacks.
4
Figure 2: Horizontal integration
Application Management
Middleware Management
Virtual stack Management
Application
Application
Application
Middleware
Application
Middleware
Virtualization Stack
Application
Middleware
Virtualization Stack
Hardware Management
Processing capacity resource pool
Processing capacity resource pool
Network Management
Network resource pool
Network resource pool
Are legacy environments
vertical and cloud
environments horizontal?
Legacy and traditional IT landscapes can
typically be seen as vertical where there is a
dedicated environment for each application. In
reality, most implementations are already using
some horizontal services (shared networks,
centralized backup or monitoring, etc.), as well
as some integrated application stacks.
On the other hand, cloud infrastructures
are considered to be horizontal, with basic
resources provided by IaaS (Infrastructure as a
Service), the development landscape provided
by PaaS (Platform as a Service) and the application landscape provided by SaaS (Software as a
Service).
Cloud architectures and especially SaaS can
also be considered as highly Vertically Integrated Stacks, although they lead to multiple
vertical silos. For example, CRM may come
from Salesforce.com (a full stack that leverages
customized and optimized middleware and
hardware) and messaging may come from
Google (another full stack with strong integration of software components over custom-built
servers).
Top-to-Bottom Technology Provision
Vertically Integrated
Stacks - Who are the
players?
IBM
IBM has a significant leading market position in
Top-to- Bottom technology provision. It has not
only been the pioneer of the provisioning of the
entire data center stack for decades, but also
leads the market in Mainframes, middleware,
and business application solutions. For years,
IBM has been provisioning the most complete
‘de-facto’ VIS under different formats.
IBM constantly reinvents itself by repackaging
existing assets, alongside a number of timely
acquisitions (e.g. Rational and Cognos). For
example, the IBM cloud offering includes ‘WebSphere® CloudBurst’, a Cloud-ready hardware
appliance with virtualization components.
On the other hand, IBM has maintained a
certain level of of openness with their stack
components. For example, WebSphere®
Process Server can execute either on top of
a proprietary Power VM/AIX platform or on a
pure VMWare ESX, enabling horizontally-based
implementation.
Oracle
Oracle is the perfect example of a company
that has grown by acquisition, starting with the
acquisition of PeopleSoft in 2004. In the last five
years, Oracle has closed large deals including
purchases of Siebel Systems, Hyperion, and
BEA Systems. Analysts assess the value of the
acquisitions to be around $35 billion to date.
The acquisition that firmly positioned Oracle, a
traditional software provider, in the datacenter
VIS market was that of SUN Microsystems. SUN
previously had its own acquisition track record,
including Storage Tek in 2005 and MySQL in
2008.
Over the last few years, SUN and Oracle have
been supporting fairly heterogeneous (horizontal) architectures. For example, SUN developed
an extended Hardware Compatibility program
for Solaris and it even approached open
standards with Open Solaris and the acquisition
of MySQL. Oracle’s strategy was to provide bestin-class software products, compatible with the
Top-to-Bottom Technology Provision
maximum number of platforms. With the large
SUN acquisition, Oracle is already packaging
its first pure VIS solutions, including ‘Exadata’,
which combines former SUN storage and servers hardware with Oracle Enterprise Linux and
the Oracle relational Database Server. In parallel,
Oracle is adapting its support strategy to favor
customers using its complete stack of hardware
and software.1
Hewlett Packard
Hewlett Packard (HP) has also grown via several
acquisitions, the last most significant acquisitions being 3PAR (utility storage) and 3Com in
2010. The acquisition of Compaq (that had previously acquired Digital Equipment Corporation,
once the second largest computer company in
the world after IBM) gave HP a leading position
in the personal computer and servers market.
While continuing to be the world leader in
revenue for server sales2, HP boasts one of the
largest portfolios, ranging from consumer workstations and peripherals to large enterprise prepackaged solutions. Although there continues
to be proprietary legacy systems from the DEC
era, most solutions offered by HP are sustained
by third-party software running on HP servers,
storage and network infrastructure. Major alliances exist with Citrix (for XenAppTM virtualization software), VMware, Intel and Microsoft.
HP-UX maintains an important market share on
the UNIX segment, and together with IBM AIX
and Oracle Solaris, covers around 80 percent of
deployed UNIX systems.
HP’s strength is reinforced by its ability to provide complete attractive prepackaged services
on top of its VIS offering, including its own
infrastructure with integrated third-party partner
components (e.g. HP Converged InfrastructureTM, HP BladeSystem MatrixTM). HP is also
packaging private cloud solutions, such as HP
CloudstartTM.
Acadia (EMC + VM Ware +
Cisco)
Acadia LLC is a joint venture born from agreements between Cisco, EMC and VMware and
initially targeting large enterprise customers willing to build their own private clouds. Acadia is a
services company that delivers packaged cloud
solutions through so-called ‘V-BlocksTM’. These
are preset, pretested and preconfigured racks
that include all required hardware and software
stacks (CISCO blade servers, EMC arrays and
VMware vSphere virtualization software) that
are managed centrally using EMC Ionix Unified
Infrastructure Manager (UIM).
The modular solution is offered in three flavours,
depending on required scalability, targeting a
wide spectrum of customers.
V-Blocks do not replace any of the vendors’
individual products which can still be obtained
via traditional channels.
Microsoft
On upper software layers, Microsoft plays a
leading role in the software stack, partnering
with hardware providers and integrators to
resell its software products. It offers the broadest hardware compatibility list on the market
by allowing Windows Server to be executed on
almost any single x86 architecture with minimum integration effort. Since Hyper-V is part of
Windows 2008 Server distribution, Microsoft
is now looking to extend to the virtualization
market. For the time being, it is unlikely that
Microsoft will decide to extend its business to
the lower part of the stack. Its direction appears
to be to offer managed cloud services such as
Office365.
In addition, HP delivers IT management software and specific solutions for software testing,
service delivery, etc. and is able to add an attractive packaged services layer to its VIS offering
5
Figure 3: VIS providers panorama
6
IT Management
Service Delivery
Microsoft
PeopleSoft
Siebel E-business
Middleware
Acadia
Websphere
Tivoli MQ
Weblogic
Webcenter
Sharepoint .NET
Active Director
Database
Hewlett Packard
Lotus Rational
DB2
Oracle DBMS,
RAC ets. MySQL
MSFT SQL server
PowerVM/AIX
Oracle VM,
Solaris Zones
Integrity VM
VMware sphere
HyperV
AIX
Linux z/OS
Oracle Solaris
Open Solaris
HP UX
Novell SUSE
Linux
Windows Server
Blades
X86 servers
Mainframe
SPARC Blades
X86 servers
Blades
X86 servers
CISCO Baldes
Disk, Tape
SAN NAS
Sun Disk, Tape
SAN NAS
Disk, Tape,
SAN NAS
EMC
Ethernet
Switching
CISCO Ethernet
switching, routing, etc.
Operating
`` Market cycle: The 1980s were driven by
proprietary solutions (e.g. IBM mainframe
environments); the 1990s saw the explosion
of personal computers and applications
built on open systems (e.g. Windows 2000,
Oracle databases, etc.) that reached its peak
in the 2000s with the rise of the Internet and
J2EE and LAMP (Linux Apache MySql PHP)
platforms. Since then, the constant demand
for more reliability, more power, and more
agility - and the ever-growing complexity of
IT landscapes - have led to a resurgence of
interest in simpler consolidated products
such as VIS.
`` Shift in customer expectations: Dependency
on integration services has very much shifted
thanks to innovative delivery models, where
Infrastructure Layers
Several converging factors make VIS a serious
alternative for customers today:
Software Layers
Vertically Integrated Stacks
- Why now?
Oracle
Virtualization
Application
Software
IBM
System
Other vendors owning attractive and well-used
software solutions that could play a role include
CA, Redhat and Novell.
Servers
Examples of hardware vendors include Dell that
remains number three globally for server sales
and that unsuccessfully challenged HP for the
3PAR acquisition; Fujitsu that focuses on the
provision of servers and storage; and Brocade
that leads the storage networking sector, and
extends to Ethernet networking thanks to its
acquisition of Foundry. Finally, Hitachi Data Systems, historically a storage vendor, has started
selling blade servers and their own management software.
dors. The ‘X as a Service’ model is challenging
traditional models (sell hardware, sell software
licenses, sell maintenance and support). The
standardization and globalization behind
cloud infrastructures leaves little room for
sourcing flexibility. Cost-driven approaches for
basic services (e.g. Amazon EC2) erode margin and profitability. Pushing Top-to-Bottom
technology is a way to tackle that issue:
`` By proposing solutions that look like clouds
(care about the services and their features,
not about how it is done).
`` By proposing solutions to build clouds
(standardize and globalize specific products).
`` By enabling new business models (everything is included, single vendor relationship).
Storage
Among other major vendors, there is still a
significant split between those selling infrastructure components and software vendors. These
players are more likely to become part of larger
corporations that could then take advantage of
their combined solutions to form a larger competitor with a more comprehensive VIS stack.
customers expect to be left out of integration
efforts. Nowadays, the parameters for a provider selection process are based more on
the capability to deliver a full service rather
than on details of the technical implementation. Integrated VIS solutions with consistent
management features are well suited to
meeting these new requirements.
`` Marketing strategy: Vendors have sought to
leverage the products they have acquired by
consolidating them into consistent portfolios
and focusing marketing efforts on the whole
portfolio rather than individual products.
These offerings appeal to customers looking
to consolidate vendors and focus on those
with large professional services and support
organizations.
`` A strategy to lock the market: Cloud is a
threat for large hardware and software ven-
Network
What about the others?
Windows Media
Live Exchange
Top-to-Bottom Technology Provision
Opportunities what are the benefits?
Simplicity
Vertically Integrated Stacks enable customers
to enjoy a single-vendor relationship, which
simplifies contract governance and enables the
establishment of a two-way trusting relationship.
Single-vendor relationships are often seen as
a loss of bargaining power. However, in some
cases, volumes and revenues at stake are
higher in single-vendor relationships and give
some leverage for negotiation.
The open systems model, where anything
can theoretically connect to anything is a
utopia, at least from a holistic perspective. Most
systems are subject to some extent to vendor
lock-in and the cost of change can discourage
customers from switching suppliers. Often, VISs
do support standards. For instance, Acadia
V-BlocksTM host standard virtual machines that
can potentially be migrated to other platforms.
Reduced integration requirements also add
some simplicity by limiting project risks.
Supportability
Another key benefit of Vertically Integrated
Stacks is the ability to engage end-to-end supplier responsibility on support issues.
In a best-of-breed environment, a lot of productivity and quality of service is lost when
IT administrators spend hours coordinating
multiple support tickets to troubleshoot configuration issues between different suppliers. In
a mixed environment where responsibilities are
fragmented, the natural behavior of a supplier’s
support line is to assume that its products are
error-proof and to focus on demonstrating that
the issue comes from the other layers, that is
until the customer provides clear evidence that
the issue is within its scope of responsibility.
In addition to reducing the need to coordinate
multiple vendors, Vertically Integrated Stacks
should solicit higher levels of commitment from
the supplier. The limited amount of customized
integration features under customer responsibility enables suppliers to take responsibility for
the full stack. VISs also enable end-to-end commitments and SLAs on availability, performance
and capacity, something that is very difficult
to achieve contractually in horizontal environments.
Top-to-Bottom Technology Provision
This often results in risks being taken by the
customer or systems integrator (that must pass
that risk on in the form of higher costs).
Stay lean
Choosing Vertically Integrated Stacks is an
opportunity to focus on functionalities and not
reinvent the wheel in terms of the integration of
each layer.
A number of IT specialists believe that their
added value derives from the ability to build bespoke solutions from best-of-breed components
that are perfectly aligned to the specific needs
and context. That often leads, at worse, to complex designs that are not always aligned to best
practices; and, at best, to a working solution that
is that is over engineered and delivered late by
a costly project. By having limited customizable
features, it is possible to reduce the incidence
of specific and dedicated solutions. This is
especially true in areas like ERP where using
standards from VIS solutions in the predefined
workflows can help standardize and streamline
wasteful processes.
Vertically Integrated Stacks are normally very
scalable as they typically ‘scale-out‘ by adding
or removing standardized VIS Blocks rather
than requiring disruptive ‘scale-up’ upgrades. In
environments where capacity variability over
time is important, the linearization of scalability
is a significant benefit.
Time to market
Market differentiation is not limited to just cost
efficiency, but includes agility and the ability to
react quickly to the dynamic nature of most
industries. The ‘plug and play’ nature of Vertically Integrated Stacks helps to reduce time to
market.
In addition to reducing integration costs and
technology risks, Vertically Integrated Stacks
usually enable a shorter set-up lead time than a
traditional best-of-breed implementation.
A good example is the HP CloudStart initiative,
which is build on the promise of setting-up a
‘private cloud’ infrastructure in less than 30
days.
Optimized platforms
Cost effectiveness
One major benefit of Vertically Integrated Stacks
is that each piece of the stack has been finely
tuned to deliver the target service and to interact with the other elements of the integrated
solution.
In the short term, bundling multiple components into a large purchase provides more
bargaining power for end customers and more
commercial flexibility for vendors as different
products have different costs and therefore
associated margins. In some cases, the positioning of Vertically Integrated Stacks enables a
substantial reduction in investment compared
with the separate acquisition of components.
Even if individual components in the stack are
not best of breed in their category, they are
normally ‘good enough’ and fit for purpose as
smart design choices can be made to complement other components in the stack.
The limited compatibility and usage requirements also enable more stable and more secure platforms to be built. This is a consequence
of reduced complexity.
There are also optimization benefits to be
gained from the ability to integrate and unify
management features in a Vertically Integrated
Stack. The unity and consistency of management functionalities eases the provision of Run
Book Automation (RBA) features, something
that is still very complex in heterogeneous
environments.
In other cases, the VIS is not cheaper, but justifies an added value and a better contribution
to the TCO by enabling the reduction of other
costs (hosting/power, integration, operation,
etc.). Vendors might announce indirect cost
savings that should be carefully measured and
verified on a ‘real-life’ pilot.
Vertically Integrated Stacks can be composed
of components with different lifecycles (e.g.
storage & backup components usually have
a longer lifetime than servers). Traditionally,
the residual book value of the longer lived
components was a problem and having a single
lifecycle for the VIS avoids this while dramatically simplifying the technology refresh process.
7
Stability/evolution
In order to be able to deliver Vertically Integrated Stacks in the long term, all of the pieces
within the stack need to move in lock step.
Since all components in the stack are designed
to work together, it is likely that upgrades will
have to cover the full stack.
In operations, where most incidents are related
to change management, getting a platform
that evolves slowly but surely and consistently
among all the layers can be considered a plus.
One drawback is that this affects the integration
of new innovative technologies, since the entire
stack can only move forward as fast as the slowest component upgrade.
8
“The open systems model, where anything
can theoretically connect to anything is a utopia, at least from a holistic perspective”.
Since VISs are based on a limited set of
components from a single vendor, most of the
compatibility and acceptance tests are covered
by the supplier who warranties the consistency
of the full stack.
In a mid-term view, big players are less likely to
leave the market than small niche vendors, and
are progressively acquiring innovative companies once their new technologies become
mature. Choosing Vertically Integrated Stacks
from these big players will enable the user to
follow the mass market whilst benefiting from
innovations once they have proven successful.
Top-to-Bottom Technology Provision
Risks & Technical
Challenges
While VISs can provide compelling business
benefits, consideration must be given to the
possible consequences of adopting such an
approach, based not only on hypothetical
outcomes, but also on existing experience
with vendors providing a Vertically Integrated Stack.
Level of integration
Although these vendors present their offerings as turnkey solutions, the so-called VISs
are made up of separate products usually as a
result of one or more acquisitions. This means
that the various components that make up
the stack have to be integrated. This may take
a long time depending on the complexity, the
number of components and development
costs.
In addition, typical growth by acquisition
is almost never transparent to technology
challenges. Examples are well documented in
the industry, such as the inconsistency of the
user interface, the continuous use of separate
management tools and the availability of different Application Programming Interfaces (APIs)
years after the acquisition has taken place.
Integration goes beyond technology as it is
necessary to harmonize other aspects of the
business, such as licensing and support models,
as well as professional services whilst taking into
consideration the impact on existing customers
of some part of the stack.
Finally, depending on a user’s specific needs, the
degree of fit of an integrated solution with its
environment can be variable, and usually Topto- Bottom technology can introduce a number
of unused or unnecessary functions as ‘part of
the package’.
Vendor lock-in
Experience shows that most VIS vendors
will sooner or later favor proprietary technologies over open standards most often to
create differentiation from other stacks and
to ensure vendor lock-in. IBM Mainframes are
perhaps the earliest example of this, but more
recent examples are Cisco and HP’s compute
platforms where the use of propriety switching
technology precludes wider integration with
other vendors. While this may be acceptable
for end users, the situation is very different
for system integrators who are pursuing the
industrialization of their services based on open
and standard architectures and who are also
likely to inherit different solutions from different
customers.
Top-to-Bottom Technology Provision
Early indications are that VIS vendors are pursuing a bundling strategy and offering attractive
discounts to customers who buy the integrated
offerings. While this may appear to be an attractive proposition to begin with, the intention is of
course to capture a significant market share in
order to be able to command premium pricing
at a later stage.
In addition, the proprietary nature of the
interfaces between components will increase
switching costs as customers will find it difficult
to change a single component of the solution
and have to make a choice between changing
everything or changing nothing.
The situation is hardly surprising as most companies have invested billions in acquisitions and
shareholders expect a quick and healthy return
on investment. It will be for future customers
to pay.
Flexibility
Pre-integrated stacks are normally put together
based on the most widely requested requirements. However when deploying business applications there will usually be gaps, which were
traditionally addressed by customization. While
this may still be possible to do with pre-integrated stacks, the close coupling of components
makes this more difficult and potentially requires the use of professional services from the
VIS vendor. This is expected to be an increasing
source of revenues for the stack providers.
In addition, the entire stack is only as strong as
its weakest component so what happens if the
middle tiers or the storage arrays prove to be
the bottleneck? Traditionally, the overloaded
component would have been upgraded with
the confidence that the solution would continue
to work and remain fully supported. However
with pre-integrated stacks, this cannot be done
due to the likelihood of violating the terms and
conditions of the VIS support agreement.
Finally, most preintegrated stacks seem to
assume a green field site and the expectation
is to leverage the complete functionality of the
stack so it is unlikely that customers will be able
to leverage existing components and therefore
sunk investments.
9
Additional concerns of VIS
over cloud solutions
Although both VIS and cloud offerings suffer
from similar drawbacks when it comes to vendor lock-in (due to proprietary API, infrastructure
stack, etc.) and lack of flexibility, the former has
some further drawbacks:
`` Large capital investments have to be committed at the start of the project in addition
to recurring support charges. These are
incurred regardless of actual usage of the infrastructure. This contrasts with cloud pricing
which is based upon small one-off setup fees
and on-going usage-based charges with the
ability to flex up and down as required.
`` When VIS technology needs to be refreshed,
large capital investments will again be
required
`` The risk of technology refresh is likely to
remain the responsibility of the end user or
the integrator.
Impact on innovation
Major providers such as IBM, HP, Cisco Systems
and Oracle are recognized as innovation leaders
in their core field due to their large investments
in Research and Development. However they
are followers in other areas as they cannot
sustain leadership in every technology area in
their extensive product portfolios. In these other
10
areas, disruptive technologies often emerge
from start-ups and small companies that are
not burdened with the necessary support of
legacy technologies and are able to specialize in
a specific niche area. These small innovators are
usually willing to take greater risks as they have
no existing revenues or reputation to protect.
Established vendors have on occasions provided initial support to innovators (such as JBoss,
VMware, Riverbed) and this has had the effect
of accelerating the adoption and refinement of
disruptive technologies. It is hard to imagine a
VIS vendor providing this benign initial support
in the highly competitive world of the future. If a
VIS vendor identified a small company owning
a new innovation that would benefit its existing
stack, it is most likely to acquire that company
in order to monopolise the idea.
“Although vendors
present their offerings
as turnkey solutions,
the so-called VISs are
made up of separate
products usually as a
result of one or more
acquisitions.”
The close coupling in the stacks can also incur
significant development effort and regression
testing. This can lead to delays in the integration
of innovations. Furthermore, customers of the
VIS vendor are unable to integrate the innovation themselves and have no choice but to wait
for the incumbent vendor to catch up.
The VIS approach is likely to result in a small
number of competing vendors, potentially leading to a situation where customers are forced to
accept unexceptional technologies at premium
prices. These technologies will increasingly be
protected by patents and the risk of expensive
litigation will discourage innovation in any
remotely connected area.
Top-to-Bottom Technology Provision
So, what should
be done?
What -if scenario Follow the wave
IT doesn’t usually add much value by
reinventing the wheel.
Vertically Integrated Stacks enable a virtuous
respect of Pareto’s rule: 80 percent of standards
provided off the shelf, 20 percent of customization to adjust to specific needs.
Even if building your own car engine can be fun
and bring some benefits (performance,
consumption, etc.), buying a standard car
enables you to focus on what is really important: what do we take with us and where do we
want to go? The same rules apply to IT, most
of the real value is in the data and in the way IT
systems support the business strategy.
As Vertically Integrated Stacks enable part of
the hassle of managing the complexity and
diversity of IT infrastructure layers to be
removed, it is a good choice to save time and
effort on non-strategic tasks.
Top five actions to succeed in the
‘Follow the wave’ scenario
Top five showstoppers to care about in the
‘Follow the wave’ scenario
Take advantage of the Top-to-Bottom technology trend to get a good deal.
Vendor lock-in. Choose a VIS that supports
open standards, anticipate data migration
issues.
Limit customization: adjust requirements to the
target solution and sometimes be prepared to
change the way business is done and not the
systems.
Define a mid-term strategy. Keep watching new
solutions on the market. Do not hesitate to
benchmark the vendor.
Adjust internal organization and governance to
maximize benefits and minimize TCO through
optimizing resources and capacity usage.
Initial investment needed.
Carefully manage the retirement of existing
assets before replacing with a VIS.
Big promises and Paperware/Slideware
solutions should be challenged as business
cases proposed by vendors may prove to be
unrealistic.
Secure renewal conditions and maintenance
extensions from day one.
Overstated vendor claims regarding the degree
of integration of their VIS solutions.
Top five actions to succeed in a ‘Hold on to
the crown jewels’ scenario ‘Follow the wave’
scenario
Top five showstoppers to care about in the
‘Follow the wave’ scenario
Remain as standardized as possible and
avoid vendor lock-in through a multi-sourcing
strategy.
A best-of-breed strategy needs to be supported
by investment in innovation, technology watch,
tooling and integration, and the maintenance of
a strong technical office.
Resist the temptation of ‘and you get this
for free’.
Lack of technical governance resulting in a lack
of standardization and increased cost.
Where an ‘integrated stack’ approach is appropriate, companies should invest in building
their own.
Risk of late implementation due to a lack of
time or budget to accomplish the extra
Integration work.
Leverage a horizontal approach by developing and using multi-tenant shared platforms as
much as possible.
The temptation to undertake unnecessary
integration – when proven alternatives exist.
Invest in solutions that mitigate the diversity
of the environment (globalized management
or monitoring platforms, and Run Book
Automation (RBA) solutions).
Marketing pressure from VIS vendors undermining the chosen strategy.
Consider the following the market trends.
What -if scenario Hold on to the crown
ewels
Creating value in IT is all about differentiation.
Keeping hold of integration is the only way to
be able to adjust solutions to business needs
without the unnecessary overheads that hardware and software vendors are pushing in their
Vertically Integrated Stacks.
VISs can be considered a defensive approach
for vendors looking to fight the adoption of
cloud as it will eventually kill their direct revenue
model. In the mid to long term, best-of-breed
solutions will win and the adoption of standards
will happen. It is rare that proprietary approaches regain leadership.
Even if VISs were to converge with cloud and
the adoption of standards, a stack approach will
always be dependent on its weakest component (unreliable, too slow, too expensive, etc.).
Customers will almost certainly one day revert
back to a best-of-breed model.
Favoring a best-of-breed approach offers a lot
of flexibility in terms of adopting breakthrough
innovations when they become available on the
market.
Top-to-Bottom Technology Provision
“We may not be able to predict the future for
Vertically Integrated Stacks but we can at
least prepare for it.”
11
What -if scenario Go Cherry Picking
IT choices must be tactical, not strategic. Vertically Integrated Stacks are not incompatible
with a best-of-breed approach. Choosing an
integrated ERP system does not prevent an
organization from relying on external services
delivered by a shared storage platform or virtualized networks.
A TCO-driven approach can lead to a preference
for one solution or another depending on the
context and on expectations.
Is there another scenario?
A more advanced scenario could envisage
integrators or well-advanced customers building their own VISs based on open standards
thereby delivering all the benefits of a cloud
approach (no vendor lock-in) and creating partnerships with a limited number of vendors that
have a stake in the new business. These can be
defined as Virtual Vertically Integrated Stacks
(VVIS) and have the potential to combine the
benefits of best-of-breed solutions with VIS with
none of the drawbacks.
12
Top five actions to succeed in a
‘Go cherry picking’ scenario
Top five showstoppers to care about in a
‘Go cherry picking’ scenario
Take the best deal possible based on a full TCO
calculation.
Beware of short-term decisions. A good deal
today can hide a big issue tomorrow.
Keep horizontal solutions for standard needs
(e.g. a best-of-breed backup solution for open
systems).
Potential complexity due to a heterogeneous
landscape.
Consider vertical solutions when appropriate
(e.g. specific backup/archiving solution integrated with an ECM solution).
Service consistency issues. In a mixed environment, providing seamless service levels across
different architectures might be difficult.
Invest in solution a that helps keep consistency
and homogeneity (e.g. Run Book Automation
solutions).
A lack of a clear strategy and architecture.
Continue to monitor new technologies and
products, deploying them when a clear business case exists.
Redundancy and duplication due to the mixing
of a VIS and best-of-breed solutions.
Top-to-Bottom Technology Provision
Atos’ view
There are a number of compelling advantages that VIS vendors can and will be able
to offer customers. The growing interest in
both cloud and VIS services are a response
to customer demand for industrialized solutions with the following benefits:
`` Flexible commercial models.
`` Integrated online service catalogues and
selfservice capabilities.
`` Integrated service provisioning - a holistic
approach to provisioning including network,
storage, computers and applications.
`` Service management dashboards providing
a business view of the performance of IT
systems.
`` Agility - rapid response to changing business requirements. »» Reducing the elapsed
time and risk associated with migration and
technology refresh projects.
`` Increased availability including reduced mean
time to recovery.
Most VISs are still immature as their vendors
have yet to fully integrate the products they
acquired. In reality the efforts of the VIS vendors
are diluted as they still have to support the individual components as well as the VIS. The indications are that this trend will continue as the
major VIS vendors will remain opportunistic and
buy any companies with products that complement their VISs. In addition Systems Integrators
are still defining and building their VIS-based
offerings – which in turn require appropriate
strategic partnerships with VIS vendors.
Top-to-Bottom Technology Provision
Systems integrators could already start building support offerings on top of VIS solutions
to complement vendors’ support capabilities.
However, they need to become more confident
about the real benefits of VIS adoption for
customers, as most vendors are currently claiming indirect cost optimization far beyond what
is actually achievable. The adoption of more
aggressive strategies, such as implementing
some sort of Virtual VIS, would require a clever
approach towards creating strategic alliances
with the right partners.
Whilst systems integrators try to position
themselves within this new context, it seems
that VIS vendors will continue to broaden their
footprint and integrators will not be able to
avoid adoption at some point. On balance, the
best strategy for most customers is to monitor
developments and carefully consider commitments to VISs over the next 12-18 months. This
will give vendors the opportunity to complete
the acquisition of missing components and to
complete the integration work necessary to realize tangible benefits from a VIS. The best strategy for system integrators is to maintain their
existing heterogeneous stacks whilst evaluating
VISs and establish a longer term strategy which
is likely to be hybrid.
13
Notes
http://www.oracle.com/us/support/systems/operating-systems/index.html
1
Source: Gartner, May 2010 http://www.gartner.com/it/page.jsp?id=1375038
2
14
Top-to-Bottom Technology Provision
About Atos
Atos is an international information technology
services company with annual 2011 pro forma
revenue of EUR 8.5 billion and 74,000 employees in 48 countries. Serving a global client
base, it delivers hi-tech transactional services,
consulting and technology services, systems
integration and managed services. With its deep
technology expertise and industry knowledge,
it works with clients across the following market
sectors: Manufacturing, Retail, Services; Public,
Health & Transports; Financial Services; Telecoms, Media & Technology; Energy & Utilities.
Atos is focused on business technology that
powers progress and helps organizations to
create their firm of the future. It is the Worldwide
Information Technology Partner for the Olympic
and Paralympic Games and is quoted on the
Paris Eurolist Market. Atos operates under the
brands Atos, Atos Consulting & Technology
Services, Atos Worldline and Atos Worldgrid.
For more information, visit: atos.net
atos.net/scientificcommunity
Atos, the Atos logo, Atos Consulting, Atos Worldline, Atos Sphere, Atos Cloud, Atos Healthcare (in the UK) and Atos Worldgrid are registered
trademarks of Atos SA. July 2012© 2012 Atos.